TMI Blog1990 (4) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... cigarettes. Cigarettes fall under Item No. 4(2)(ii) of the First Schedule to the Central Excises and Salt Act, 1944, hereinafter referred to as "the Act". The company had 31794 M. Cigarettes in its bonded stock room manufactured prior to 28-2-1983. The rate of duty on cigarettes as on 28-2-1983 was 440 Adv. and Rs. 32.00 per one thousand cigarettes. If the stock of cigarettes was cleared on or before 28-2-1983, the duty liable to be paid would have been Rs. 21,31,515.75 but the petitioner-company cleared the above said stock, manufactured prior to 28-2-1983, on 12th, 14th and 15th of March, 1983. A change in the rate of duty has been effected in 1983 Budget by virtue of Notification No. 36/85-C.E., dated 1-3-1983 thereby imposing a higher r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates, set forth in the Schedule to the Central Excise Tariff Act, 1985." 5. A reading of this section clearly indicates that it enunciates the principle that excise duty shall be levied and collected in such manner as may be prescribed on all excisable goods which are produced or manufactured in India. The provisions of Section 3, therefore, refer to a taxable event which comes into being when goods are produced or manufactured within the Sovereign boundaries of India. In so far as the question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such date shall be the date of actual removal of such goods from such factory or warehouse. The petitioner-company seeks to challenge the validity of Rule 9A on the ground that it is inconsistent with Section 3 of the Act and, therefore, should be struck down as being illegal, unconstitutional and void. Section 3 is a charging section which determines a taxable event and it also provides that the duty shall be "levied and collected in such manner as may be prescribed". Rule 9A operates in a complementary manner to Section 3 when it provides that in the case of goods removed from a factory or a warehouse, the date for determination of duty and valuation shall be the date of actual removal of such goods from such factory or warehouse. We are, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e annual or any supplementary budget in the Parliament. However, it may be emphasized here that even under Rule 224(2A) it is clear that the date of removal of the goods from the factory or warehouse, as the case may be, is recognised as the relevant date for the purpose of assessing the goods to excise duty. 7. The learned counsel for the petitioner has relied on a decision reported in Union of India v. Kirloskar Brothers - [1978 (2) E.L.T. (J 690)] wherein it was held that excise duty being a tax on manufacture or production, the material time for liability of excise duty under Section 3 will be the date of manufacture or production. It so happened in that case that the notification withdrawing the exemption came into effect from 16-3-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aper Mills Ltd. v. Union of India 1984 (17) E.L.T. 217 (AP). It may be stated at the very outset that this is a case dealing with the question of exemption of excisable goods produced during the period of exemption but cleared after withdrawal of exemption. It was held that the goods which were produced during the period of exemption would be entitled to exemption, complete or partial, as the case may be. It is also stated that the imposition of the excise duty is on the goods produced or manufactured. Section 4 provides for the determination of the value of the goods for the purpose of duty and Rule 9A schedules the date for determination of duty and tariff valuation. It is in this view of the matter that it was held that the goods produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but may be levied at a later stage for administrative convenience. This inference is supported from Section 4 of the Central Excise Act whereunder the material point of time with reference to which the value has to be determined is the time of 'removal of the goods' from the factory and not the time when it is manufactured or produced. Therefore, the crucial time for levy of duty is the time of removal as envisaged by Rule 9A and not the date of manufacture or production of goods in the factory. It is manifest that the view expressed in the aforesaid decision tallies with the view that we are inclined to take in this case. A clear distinction will have to be made between the taxable event and the rates of duty which may become applicable t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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